lost over half a billion dollars in the of 2022 alone, EV market share is starting to fall in as competitors ramp up, and the future of a plant in Kentucky is up in the air. All that and more in for Friday, November 4, 2022.

Carvana just announced it recorded a $508 million net loss in the third quarter of 2022, which ended on September 30th. The online vehicle retailer says it has been dealing with issues like inflation, high used-vehicle prices, and rising interest rates. Those factors have kept potential buyers away.

In contrast, Carvana only lost $68 million during the same time last year. The number also beats the $506 million loss it had in the first quarter of this year.

Despite the big losses, the company still generated $3.4 billion in revenue for the quarter. That’s a three percent drop from last year. Carvana sold 102,570 vehicles during the time period. That’s down eight percent. From :

The profit it made per vehicle retailed fell to $3,500 — down $1,172 from $4,672 in third-quarter 2021.

[...]

Carvana has faced several challenges in 2022, including mounting losses of $945 million through the first half. With that additional $508 million third-quarter loss, Carvana’s losses through the first nine months of the year total $1.45 billion. By contrast, it recorded a net loss of $105 million through the first nine months of 2021.

The company’s stock price has fallen by more than 95 percent since August 2021, when it posted its first and so far only net profit in its time as a public company. Carvana has been at the center of multiple regulatory actions by state and local licensing agencies. And, dealing with sinking consumer confidence and higher operating costs in 2022, it has not escaped job cuts. In May, the company said it would dismiss 2,500 employees, or about 12 percent of its work force, and that top executives would forgo their salaries for the rest of the year.

Carvana also has been busy combining its operations with those of ADESA U.S., the large physical auction network it acquired May 9 from wholesale auctions company KAR Global. The $2.2 billion deal with KAR altered the wholesale auctions landscape, giving Carvana access to 56 physical sites and additional reconditioning prowess while putting it within reach of more U.S. customers. Carvana reported seeing the first returns from that acquisition in the second quarter.

Carvana is also reportedly in the midst of attempting to “rapidly decrease expenses,” according to the shareholder letter. The company actually reduced those expenses by $90 million quarter-over-quarter.

2nd Gear: Tesla’s Grip on California is Loosening

Tesla’s is beginning to lose its grip on the California EV market. The company now only has a 73 percent market share in the golden state, which is the lowest level since 2018. It was 75 percent and 79 percent in 2021 and 2020, respectively.

California is one of Tesla’s most important markets. The state accounted for 15 percent of the automaker’s global deliveries in 2021. From :

Tesla still sold more electric vehicles in this key market than during the same period a year ago, but rivals including Hyundai Motor stepped up sales of newer models, giving buyers more choice.

Tesla also topped brand consideration, with 53% of potential electric vehicle purchasers considering Tesla this year, according to a study by California auto consultancy AutoPacific, though that was down from 58% in the previous survey last year.

“We are reaching a saturation point for Tesla market share in California,” said Ed Kim, president of AutoPacific. He expected rivals to continue to take away market share, while also expecting Tesla sales would still grow.

In an interesting, and not totally unexpected twist, it also seems Elon Musk’s fuckery with Twitter and Republicans has hurt Tesla’s brand in liberal California. Shocking, I know.

3rd Gear: Ford Escape Plant Plans Up in the Air

The future of Louisville Assembly, the plant in Kentucky that builds the Ford Escape and Lincoln Corsair, is in doubt. Even though mid-cycle refreshes of both crossovers were recently announced, Ford doesn’t have any plans for a new generation of either vehicle.

Ford CEO Jim Farley has hinted that the Escape may not be long for this continent. That will also be an issue in contract negotiations with the UAW next year. From :

“It’s 100 percent on our radar,” Todd Dunn, president of UAW Local 862, which represents Louisville Assembly and Kentucky Truck, told Automotive News. “Is there concern about product? Absolutely. It’s always on members’ minds as far as reinvesting in Louisville and continuing on. We want to make sure every North American assembly plant has production across the board.”

[...]

Ford spokeswoman Kelli Felker, in an emailed statement, declined to say whether Ford had plans for the plant’s future but noted that workers will soon begin producing the freshened crossovers.

“Louisville Assembly Plant and our employees there are an important part of Ford’s manufacturing operations,” the statement said.

The plant currently employs about 4,100 people, and 3,900 of them are hourly workers. Still, Automotive News says that a Ford plant closing is rare.

Ford hasn’t shuttered a North American assembly plant since Twin Cities Assembly in St. Paul, Minn., closed in 2011. It was a delayed casualty of Ford’s Way Forward restructuring plan that was unveiled in 2006 to cut costs.

4th Gear: Kenya Airways Isn’t a Fan of an Upcoming Pilots Strike

Kenya Airways pilots are planning to begin a strike starting on November 5, and believe it or not, Kenya Airways isn’t too happy about it. The airline says a strike would be unlawful and could hurt the pandemic recovery.

The walkout is slated to start at 6 a.m. local time and is said to impact thousands of travelers at “one of the most important” aviation hubs in Africa. It comes after the union says it gave Kenya Airways a two-week notice to address issues. From :

The airline - which is trying to recover from a downturn in earnings during the pandemic - said the action could also affect cargo freight and also cause huge losses to farmers whose perishable goods are due for export.

“The intended unlawful industrial action negates the strides KQ (Kenya Airways) has made this year in improving its financial position following the COVID pandemic that affected the economy,” it said in a statement.

“We are willing and ready to engage with KALPA within the confines of their mandate in an open negotiation to find practical and lasting solutions.”

The strike could potentially cost the Kenya Airways $2.5 million a day.

The Kenya Airline Pilots Association represents over 400 pilots at the airline. The dispute stems from pension contributions and the settlement of deferred pay for its members.

5th: Foxconn’s New Saudi Wealth Fund Partner

Foxconn and Saudi Arabia’s Public Investment Fund are going ahead with plans to produce electric vehicles in that country. It’s a move that reportedly could help the incredibly oil-dependent country diversify its economy. From :

The pair will set up a joint venture called Ceer that will license component technology from Germany’s BMW AG and design and build vehicles including sedans and sport utility vehicles in Saudi Arabia for buyers in the region. First models are scheduled to be available in 2025, according to a statement from the PIF, as the wealth fund is known.

“Saudi Arabia is not just building a new automotive brand, we are igniting a new industry and an ecosystem that attracts international and local investments, creates job opportunities for local talent, enables the private sector, and contributes to increasing Saudi Arabia’s GDP over the next decade,” Saudi Arabia’s Crown Prince Mohammed bin Salman said in the statement.

The country has had ambitions for years to develop a domestic carmaking industry to diversify away from oil sales, but those efforts have mostly failed. The kingdom has recently been trying a different tactic, with the PIF actively investing in the industry. It has acquired a majority stake in and is backing plans by the US EV maker to a manufacturing hub in the King Abdullah Economic City, close to the major Red Sea trading port.

The venture is said to bring in well over $150 million in foreign direct investments and create as many as 30,000 jobs. Bloomberg says it will contribute $8 billion to the country’s gross domestic product by 2034.

Foxconn, a key Apple Inc. assembly partner, has been branching out into EV development and production over the past two years, seeing the rising interest in the category as a source for future growth. In its most notable move to date, the Taiwanese company earlier this year acquired Lordstown Motors Corp.’s pickup manufacturing facility in Ohio for $230 million.

Unlike so many EV manufacturers, it seems Foxconn could actually be getting their electric vehicles off the ground... with the help of oil money.

Reverse: Building Tombs Would Have Been Easier With Cars

British archaeologist Howard Carter and his workmen discover a step leading to the tomb of King…

Neutral: You Better Vote

Election Day is next Tuesday, November 8th. If you don’t vote, I will be very angry with you. Also, make the right choices. I won’t tell you what they are, but they certainly aren’t an ex-football player or a daytime TV host. See you all next week.